Partnering with a professional employer organization (PEO) is one of the best business decisions you can make. However, with nearly 500 PEOs across the United States, it is a challenge to choose the right one for your specific business.
One divide is between local PEOs who operate within a specific state or area, and national PEOs with satellite offices throughout the country. Businesses in Utah and surrounding states profit most from choosing a local Utah PEO.
What is a Local PEO?
A local PEO provides services to businesses in a specific area. Like all PEOs, they provide a large number of benefits to their clients. These include:
- Processing payroll and remitting payroll taxes. Only a PEO can remit payroll taxes for you. Other solutions can only tell you what you owe.
- Providing affordable benefits. Through the mechanism of co-employment, the PEO can enroll your employees in their own master healthcare and retirement plans, allowing you to provide higher quality benefits at an affordable price. This increases your ability to compete for talent.
- Handling risk management. Lower workers' comp premiums, safety expertise, and compliance are just some ways in which a PEO can help you manage risk.
- Managing benefits administration. A PEO can answer your employees' questions, make sure everyone knows about open enrollment, etc. This frees your HR team up to deal with core, company-specific issues.
- Ensuring HR compliance. Most small businesses can't afford a compliance officer. Through a PEO they can access the expertise needed to keep up with federal, state, and local regulations.
A national PEO also does all of this, but they might be headquartered anywhere, serving you through a smaller satellite office. The actual headquarters could be on the other side of the country.
Why Use a Local PEO?
So, why is a local PEO better than a national one which might appear to have more resources? Truth is that a local PEO has multiple advantages.
Local Service
Because their headquarters are close, you have access to all of their resources. You aren't working with a satellite office that might need to get permission from somebody off-site to help you with an unusual problem. Or, worse, a call center that might even be offshore.
You can arrange for a representative to come on-site to look at things and answer employee questions. This is particularly valuable during onboarding when employees might have some understandable anxiety about how the whole thing works.
Local HR Compliance
A local PEO only has to worry about HR laws in one specific area. National PEOs have to keep track of 50 different state laws and uncounted cities and counties.
This allows local PEOs to develop an intimate knowledge of local regulations.
Meanwhile, national PEOs may even fall short on compliance below the federal level, leaving you facing higher risks and compliance costs.
Local Knowledge
Your local PEO lives where you live, in the same community. They understand that things in Utah are not the same as in California or New Jersey.
They can better personalize your service to help meet the specific challenges faced by your local community, understand the culture you are working in, even know how the weather might affect your business. Many national PEOs have standard packages that don't always reflect your needs and getting things adjusted can be really hard.
This local knowledge can be particularly valuable for new or relocated businesses.
Local Reviews
How valuable to you is a review written by somebody in Florida? Not as valuable as one from somebody in the chamber of commerce who you know and trust. A local PEO has local customers and thus local reviews and the kind of word of mouth reports you need to make such an important decision. Changing PEOs can be a major hassle, and often comes with negative tax implications, so you want to get it right the first time.
Local Prices
National PEOs have an HR outsourcing pricing model that is based on the most expensive states. Why should you have to pay New York prices in Utah? Even if they average things out, customers in states with low costs of living and more relaxed compliance may end up subsidizing those in high-priced urban areas.
Particularly in a state like Utah, local pricing is typically going to be more affordable than price tiers set in a central office somewhere with expensive real estate.
Local PEOs Cost Less and Do More
By choosing a local PEO, you get numerous benefits. These include better service, an intimate knowledge of local conditions and regulations, more reliable reviews, and a pricing structure that matches local costs.
You literally get more for less. Partnering with a PEO is a no-brainer, but choosing a local one makes it an even better choice for the future of your business.
